Budget 2018-19: Maha finance minister has task cut out for him

Farm loan waiver and Seventh Pay Commission may not leave room for big-ticket projects

mumbai Updated: Mar 08, 2018 23:47 IST
State finance minister Sudhir Mungantiwar and Minister of State for Home (Rural) Deepak Kesarkar scan a copy of budget that will be presented tomorrow. (Anshuman Poyrekar/HT)

The BJP-led state government will present its fourth budget in the legislature on Friday and the focus is on two disgruntled segments in the state — farmers and youth.

Faced with the burden of farm loan waiver and commitment towards implementing the Seventh Pay Commission for state government employees, finance minister Sudhir Mungantiwar has to maintain a fine line between a populist and a realistic budget.

Given the state’s commitments, he has little maneuvering space to announce new big-ticket projects. Chances are it may not be an election budget as speculated earlier, especially when the assembly elections are just a year away.

Mungantiwar had earlier said that if all goes as per plan, he will table a full election budget in February 2019.

Apart from loan waiver and hiking salaries, the state’s commitment to ongoing infrastructure projects such as like 10,000 km of new roads under the hybrid annuity model and 205 ongoing irrigation projects are likely to take away the remaining resources meant for other developmental works.

State revenue minister Chandrakant Patil on Wednesday said funds will be given to the public works department allocation (PWD) for building 10,000 km of new roads.

“The budget is going to be a bit of a status quo because we have no room to do much. Several big-ticket infrastructure projects have been announced and we have to shell out our share for Centre-sponsored schemes too. Our commitments towards loan waiver and pay commission means we have stretched our resources,’’ said a finance department official.

Within the available space, the state is likely to announce more funding for skill development or employment-oriented schemes besides collating spending for agriculture and allied sector to show how its investment in the farm sector has increased.

There could be an announcement or allocation to assure Minimum Support Price of 1.5 times the production cost to farmers. The Goods and Services Tax (GST) rollout also means the state’s finance department has little scope to raise taxes.

“We can aim at increasing our non-tax revenue by increasing government fees, cost of stamps or penalties. We plan to increase this base,’’ Mungantiwar had said earlier.

Considering the revised estimates for 2017-18, the state managed to increase its revenues from 2016-17 fiscal. The state had recovered Rs1.66 lakh crore until December 2017, up from Rs1.40 lakh crore, in tax and non-tax revenue. The estimate for the upcoming fiscal is likely to be more optimistic. However, the state’s debt is expected to breach Rs4. 13 lakh crore.

“Our debt is very much within the fiscal norms and below 22.2% (in ratio to the state’s GSDP), as laid down by the Centre. Our debt to state GSDP ratio comes to 16.6%. Our fiscal deficit is 1.6%, as per revised 2017-18 estimate. This may increase a bit, as we have room to borrow more,’’ Mungantiwar added.

First Published: Mar 08, 2018 23:47 IST